So apparently, you’re saving 50% of your income. Again, how many people can afford that?
And where is situated this median 2100 sq ft home? I suspect not in Manhattan. Someone pointed out that some people compare their situation with the best elements of their coworkers’ lifestyle (so they think they should have the same house as Tom who spent a lot on his house, the same vacations as Bob who spends a lot on vacations, the same car as John who is really into cars, etc…). I suspect it’s the same issue here. People are thinking their lifestyle is “modest” unless they have a house the size of their cousins’ who live in Middle-of-Nowhere, in a neighborhood as nice as their in laws who have a long commute, but in the middle of New-York, as their coworker. Same thing with being able to afford a private school and saving money for retirement and taking vacations, etc…
If you have everything “nice”, you have an affluent lifestyle, not a modest one. People on ordinary income have one or two “nice” things. Poor people have none.
Actually I should have said 2 hours, which many people did during the housing bubble. I commute 45 - 1 hour each way and I’m only 15 miles from work. Some people were 30.
BTW 1300 sq foot houses in my neighborhood are $600K. And you can’t get anything smaller. $100K in the Bay Area is just enough for a modest life. And it does not include private schools, nannies, or expensive vacations. Here is data from Santa Clara County the heart of Silicon Valley. Median income is $89K. Median value of an owner occupied home is $681,100. That is median. They don’t show mean income, but I bet it is much higher.
I’m from New York, so I know cities, and I’ve been to Paris a few times, but if you compare the environment you live in to here - you win big.
Yeah, $100K a year even here is not even close to starvation level. But it sure isn’t luxury, and gives a lifestyle maybe a bit worse than what my father could support as a single earner working for the UN in a non-executive position.
In many parts of the country $100K could give a really good life. Not here and not in most big cities. I’m not arguing the economy hasn’t screwed over lots of people even worse.
Not many. But even half my income is quite high by national standards. And at half my income I would not be starving, but I would be looking for a roommate.
No, and not anywhere near any big city. The point is that when I compare the objective aspects of my home to other places around the nation, it is not luxurious. It is modest.
I basically have three options here:
Live close to where I work and accept that I can’t afford a home that would be average almost anywhere else in the country.
Live a bit farther from work and accept an insane commute. The hours of commute time cut into my free time and the extra gasoline and automobile wear cut into my salary. But I can afford an average house.
Live much farther away and accept a much lower salary, because there just aren’t the jobs available for software engineers. I can still only afford an average house.
I’m glad I actually have options here, but none of them amount to luxury. I choose to live close to work specifically because I don’t care about having a large place and I don’t have a family. Two of my friends moved out of state, accepting a big pay cut, because they wanted to start a family and couldn’t afford a house otherwise.
Okay. I have a car which was quite nice 10 years ago, but is worth <$10k now. My computer is good, but a few years old. I have a nice Android smartphone.
My biggest “nice things” are living in California and my short commute. These are indeed very valuable to me and I’ve given up other luxuries to have them.
At any rate, I do want to be clear that my income does make me affluent. I could actually live luxuriously if I cut my saving to zero–I just choose not to. Despite this, my spending is still well above national levels.
FTR wouldn’t that be full (tenured) professors in the typical American English usage? I thought adjunct, associate, and assistant profs aren’t particularly well paid, especially compared to their peers in other occupations you mentioned, e.g. freshly minted associates at big law firms, etc.
Well no, it’s actually a $150,000 house, but it’s sitting on $150,000 worth of soil. Look around at vacant lot prices in your neighborhood. The guy with the $300,000Victorian has a $260,000 house sitting on $40,000 worth of soil. It’s the combined value that skews the equation.
There’s an old, well-known Spanish song where the refrain is “we all want more and more and more and a whole lot more”.
Todos queremos más
todos queremos más
todos queremos más
y más y más y mucho más.
We all want more
we all want more
we all want more
and more and more and much more.
The poor man wants a little more
the rich man wants a lot more
and no one is satisfied with his lot
He who has a dollar
wants to have two,
He who has five
wants to have ten
He who has twenty
is looking for how to have forty,
and the one with fifty
wants to have a hundred.
But there’s a reason people want to live there, right? The awesome weather, or the cornucopia of sweet software development jobs, or maybe the chance to run in to Marc Andreessen at a juice bar. What clair is saying (much better than I could) is that these factors should be taken in to account when you try to determine the relative level of luxury provided by a particular income level.
When people say that $100K isn’t luxurious because they have X number of children, I would definitely agree with them. But I would also say that their children are voluntary expenditures, who are presumably very much worth their cost. Having X number of well-educated, well-orthodontured, well-rounded children is a choice, just as surely as buying an expensive car or an taking expensive vacation is. Presumably people have children for a reason; it’s not like they just show up randomly on people’s doorsteps.
It’s kind of like if I complained that I’m not well-to-do since I have an expensive house to maintain and furnish. The house is my wealth, though. Family is an intangible form of wealth, but it’s still wealth.
I was responding to your comment that seemed to question why these idiots were making a lot of money while you weren’t. But really, it’s a question that a lot of people should ask themselves. If people want to earn a level of income significantly higher than the average for their location and education level, they either need to do something extraordinary or pick a career with a high income.
Income isn’t necessary correlated to intelligence or common sense. You don’t need to be a genius to do real estate sales, but you can make a lot of money doing it.
It’s a luxury in that it allows you to live in NYC. No, you aren’t living Gordon Gekko style. But having close access to a multitude of jobs, parks, schools and other critical infrastructure is a benefit in and of itself. IOW, $100k a year gives you the ability to live someplace where there are jobs that pay $100k a year.
If you reread what I wrote, you’ll see I wasn’t questioning why idiots make more money than I do. I was questioning what’s wrong with me that I’m not making as money as they make.
Your facile advice indicates that you completely missed the self-depreciating thrust of my post.
The reason I moved here is that when I left Bell Labs this is where the jobs were. And when I left the first job I took here there was no disruption for my family and a shorter commute for me. Competition leads to higher salaries. Yeah, the weather is good but I was fine with New Jersey also.
My Girl Scouts were talking this morning, four of them were over.
My daughter and I are going on a school trip to the UK this Summer, one of the other girls is going with her family to France - very nice trips and one of the girls said something.
My daughter is from a family with two children. I just quit my job recently, but worked until my kids were teens in a good job. My husband is a IT VP for a pretty big company. Since we stashed away much my my income, and his is good, we can afford a nice trip next summer.
The girl who is going to Paris is an only child. Her mother has always been a stay at home mom, her Dad is a VP for a Fortune 500.
The third girl has a Dad who is senior IT management somewhere (he switched jobs and I’m not sure where he landed), but there are half a dozen kids. Her mom stays home. As she said “they could send me to the UK if it was just me, but to be fair, they’d need to be able to afford to do it five more times.” And she is right. She’s never been on an airplane.
The forth girl has a Dad who is blue collar and a mom who works part time. She is one of two kids.
So four girls, and three good incomes. But three sets of different situations. It is perhaps telling that we are all living in the same neighborhood is similar homes (the home of the family of eight is bigger and nicer than the rest, but not that much nicer - and it needs to be that much bigger, everyone else is a family of four or less).
I grew up in a fairly consumerist family, so I understand “Keeping up with the Jones’” as a concept, but when I started supporting myself, I quickly came to realize what kinds of things really had value to me. I only make $30,000 in a thriving city and in a decent location, but it’s enough that I don’t feel too squeezed. I live in a house with a single mom and her kid, I have a crappy car, I buy used clothes, I don’t go out drinking, etc. But I am able to have nice musical instruments, a nice computer, take dance lessons, and travel. Those things are total luxuries, but I can afford them because of other sacrifices.
Thing is, even as I’m making more money than I used to, I find that I’ve outgrown the need to have the latest cool crap, like a good car or the latest i-thing. I don’t miss those things, and I know what things give actual value and happiness for me. Even if I were to gain significant wealth, the biggest change would probably be living on my own - I still don’t need to have fancy clothes or car or furnishings.
Don’t most people have at least some phase in their life (like college at least?) where they don’t have access to all the luxuries, and realize that they don’t actually need most of them?
My much wealthier friends don’t give me shit for those things, so I wonder where this materialist pressure comes from for chronic overspenders. Is it actually external, with cohorts actively looking down on you for showing up to the company party in a 1997 Kia? Or is it mostly in the head, where you think all these things about how you’re perceived, when in reality almost no one is actually making these judgments and/or making these judgments known?
No one thinks money will change them, but it does.
Let’s say you got a job that pays you a little better–$50K instead of $30K. You’re getting paid to carry out more responsibilities. Like interacting with the public and attending meetings. You have a higher profile, so you have to deal more closely to management.
Thrift store clothes aren’t going to cut it. It’s not that people will merely cut their eyes at you if you come walking in with a faded sweater and run-over shoes. They will say shit to your face. Secretary all the way up to supervisor.
(I speak from personal experience here).
If all your coworkers make the same or less money as you, driving a crappy car doesn’t make you stand out. But now you’re rubbing shoulders with management. They aren’t driving BMWs, but they ain’t pulling into the parking lot in 35 year-old Ford Pintos. And your Ford Pinto? It’s not dependable, which is not good when you’ve got to drive to the other side of town on a moment’s notice to meet with clients. And if you ever want to carpool? Well, if no one wants to drive over to the crappy side of town to pick you up, you’re SOL.
It’s a matter of “keeping up”. Not necessarily out of jealousy/envy, but because you want to maintain a feeling of social connectiveness. For instance, before I got a Kindle, I didn’t know what an app was. I’d inwardly roll my eyes every time someone would mention an app. I’d outwardly roll my eyes every time I saw someone engrossed in their smartphone or tablet. Now I totally get it and I feel like I’m able to converse with regular, everyday people. I don’t feel that distance that I felt before I jumped on the bandwagon.
If everyone around you is talking about their house and appliance-shopping and expensive vacations and movies they watched over the weekend, you aren’t going to have very much to say in any of these conversations if you hold onto your pennies too tight (or you don’t have pennies at all).
I’ll admit that I skipped ahead, but I wanted to say that in my working life, I’ve made upper middle class income, lower middle class income, and all levels in between. No matter my income, it was/is easy to see that X (being whatever my current income is/was) +10% would be a godsend and X-10% would put me in the poor house.
Modern humans have a natural tendency to expand the definition of “getting by” to what their current lifestyle happens to be.
I think however, part of the issue is that those with a good income sort of resent being lumped in with the wealthy. We have a good income. We have almost nothing in common with the people who live here:
I have far more in common with the people who live here who live in my neighborhood and shop the same places I shop and whose kids would go to school with mine.
Naturally, it is in a sought-after area. It’s the value of the land the house is sitting on, not that of the house.
However, my point is that it is stretching the meaning of “luxury” out of all recognition to equate pure financial value with “luxury”. There are all sorts of reasons why the two are not directly equatable.
A person living in a decrepit shack an land that is very valuable (to take a reducto ad absurdum) isn’t living in “luxury”. There may well be reasons why it is difficult for him or her to turn that land into luxury-creating wealth.
One immutable characteristic of “wealth” that seperates it from other forms of value is that it is fungible - that is, a person can take “wealth” in one form, sell it, and purchase wealth in another form.
While someone with a family, good memories, or other types of value can be said to be “wealthy” in a colloquial sense, they are not wealthy in a far more significant tangible sense - because their “wealth” is not transmutable into any other form.
This is why a family of a vacation isn’t “wealth” in the same way as owning a valuable house. If your carreer hits the skids, you can (presumably) sell the house, assuming there are no good reasons why you can’t. You can’t sell the family. Indeed, unlike a house, you owe your kids all sorts of duties you cannot in good concience ignore. It isn’t really that much of a “choice” one the kids are born - you can’t, in good concience, simply “choose” to spend your cash on yourself and not them.
This is why someone who is out of work and has several kids is not in the same boat as someone who is out of work and has a large stock portfolio.
Not exactly. All wealth is exchangeable for other forms of wealth. At least when we are talking about wealth in the traditional accounting/finance sense and not the colloquial good health and interpersonal relationship sense. Although those intangible forms can also be considered “wealth” as one does derive some utility and enjoyment from them.
What makes someone “wealthy” instead of merely just “rich” is that they own assets that continue to generate value for them. For most people, their wealth is derived from their salary and possibly locked up in their primary residence. That wealth is limiting as their revenue is a function of the market value of their labors and the number of hours they can work in a day. And their main asset (their home) typically does not generate additional revenue and is offset by a large debt (their mortgage).
People become wealthy because they take their income and convert it into assets like businesses, investment properties and other sources of passive income. Rich people become poor because they constantly buy a bunch of crap to impress other people and then can’t afford it if their source of income is interrupted.
No, I get it.
The reason you feel that way is because our society celebrates idiots who somehow manage to take shortcuts to fabulous wealth. The day trader. The dot-com millionaire. The realty TV star.
I spent most of my career working in technology, starting in the mid 90s during the dot-com. The typical narrative is as follows:
You should drop out of college or quit your boring big-company corporate job to start your own tech company. Or you should at least find some other brilliant kid who dropped out of college or quit his boring big-company corporate job and work for his tech company. If you spend every waking moment working to come up with the latest and greatest thing, you will land some VC angel investor funding, launch an IPO and retire a millionaire (or billionaire) before you turn 30. Or you gradually become obsolete and useless.
Now, most people in that industry probably know that isn’t what actually happens most of the time. But every time you read about some brilliant entrepreneur in Wired magazine or see a company like Instagram make billionaires overnight, it creates that nagging in the back of your mind that if it’s so easy to do that, why aren’t I going out and doing that right now?
And that’s an industry where smart people actually make stuff. I imagine there are plenty of idiots who see the Kardashians, Jersey Shore or Real Housewives and think “why can’t I get rich shopping, drinking and just generally acting like a crazy asshole all day long”?